From Clinton to Obongo

[jnevin]

Not sure off the top of my head (would be interesting to know), however wasnt one of the significant problems was lenders pushing folks that didnt need conforming loans (eg folks with good employment/credit) into these types of loans due to incentives?

That sort of supports the theory that greed was the primary driver of the crisis.

Subprime Debacle Traps Even Very Credit-Worthy - WSJ.com

Well, there were conforming loans backed by fannie and freddie called EA (Expanded Approval) loans that were honestly worse than subprime loans. I do think there were brokers that would try to get borrowers that were prime, or on the bubble of being prime, to take subprime loans on second homes or investment properties. Less $$ down, and there were usually kickers on back end pricing if their credit was at certain scores.

One thing to keep in mind is, a 720+ fico doesn't make a borrower prime in home lending.

 

[75th]

Well, there were conforming loans backed by fannie and freddie called EA (Expanded Approval) loans that were honestly worse than subprime loans. I do think there were brokers that would try to get borrowers that were prime, or on the bubble of being prime, to take subprime loans on second homes or investment properties. Less $$ down, and there were usually kickers on back end pricing if their credit was at certain scores.

One thing to keep in mind is, a 720+ fico doesn't make a borrower prime in home lending.

Good call. The elephant weve ignored is the substantial role our cohorts on Wall St played in this. Foreclosures and a housing bubble burst would have sucked on their own, but the primary reason for the economic woes we went through was due to the compounding effects of this brought on by greed/lack of oversight on firms such as AIG, JPM, etc. Which, again, is why Clinton deserves a ton of the blame. The GLBA and CFMA set the stage. Folks like $50k incomes buying $500k homes played a role, but that role was literally peanuts compared to the role of financial firms.

And then, of course, we bailed them out. That was our governments biggest addition to this crisis.

 

[Headholio]

Not sure off the top of my head (would be interesting to know), however wasnt one of the significant problems was lenders pushing folks that didnt need conforming loans (eg folks with good employment/credit) into these types of loans due to incentives?

That sort of supports the theory that greed was the primary driver of the crisis.

Subprime Debacle Traps Even Very Credit-Worthy - WSJ.com

http://www.ritholtz.com/blog/wp-content/uploads/2011/07/Unbenannt1.png

That kind of answers the question, but the important thing to see in that graph is that Fannie and Freddie higher risk loans performed better than the private sector, roughly the same as the national default rate, and did not account for the much larger subprime crisis.

 

[Headholio]

Nice job redsam. You went down a path that nobody was on, threw out a statement that had nothing to do with what was being talked about, and used a dumb fucking smiley to act like you proved some sort of point.

Listen plunkey jr. just because you are too stupid to understand the point, doesn't mean I didn't make one.

The point is that Republicans argue against Government regulation but at the same time blame Clinton for loosening regulation.
Hypocricy.

Now onward, I've already shown that your initial presumption about CRA loans caused the meltdown is wrong, and now I'm going to show you that you other talking point concerning Fannie and Freddie being to blame is also wrong, so pay attention.

 

[Headholio]

Did Fannie and Freddie buy high-risk mortgage-backed securities? Yes. But they did not buy enough of them to be blamed for the mortgage crisis. Highly respected analysts who have looked at these data in much greater detail than Wallison, Pinto, or myself, including the nonpartisan Government Accountability Office, the Harvard Joint Center for Housing Studies, the Financial Crisis Inquiry Commission majority, the Federal Housing Finance Agency, and virtually all academics, have all rejected the Wallison/Pinto argument that federal affordable housing policies were responsible for the proliferation of actual high-risk mortgages over the past decade.

Wallison: Still Wrong About Genesis of Housing Crisis | The Big Picture

 

[Headholio]

Federal Housing Finance Agency Found That Fannie, Freddie Loans Posed Less Credit Risk Than Those Financed With Private-Label Mortgage-Backed And Asset-Backed Securities. According to a September 2010 report by the Federal Housing Finance Agency, single-family mortgage loans originated from 2001 through 2008 and financed by Fannie and Freddie had higher credit scores, which are "associated with" lesser "mortgage credit risk," than did mortgages financed with private-label mortgage-backed securities. The report further found that loans financed by Fannie and Freddie were more likely to be fixed-rate -- which means they performed better than adjustable-rate loans in the analyzed data -- and were less likely to ever be "90-days delinquent" than mortgages financed with private-label mortgage-backed securities.

http://www.fhfa.gov/webfiles/16711/RiskChars9132010.pdf

 

[Headholio]

CONCLUSIONS OF THE
FINANCIAL CRISIS INQUIRY COMMISSION

We conclude that these two entities contributed to the crisis, but were not a primary cause. Importantly, GSE mortgage securities essentially maintained their value throughout the crisis and did not contribute to the significant financial firm losses that were central to the financial crisis.

The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders in the rush for fool's gold

http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_conclusions.pdf

 

[jnevin]

Listen plunkey jr. just because you are too stupid to understand the point, doesn't mean I didn't make one.

The point is that Republicans argue against Government regulation but at the same time blame Clinton for loosening regulation.
Hypocricy.

Now onward, I've already shown that your initial presumption about CRA loans caused the meltdown is wrong, and now I'm going to show you that you other talking point concerning Fannie and Freddie being to blame is also wrong, so pay attention.

You haven't shown anyone anything. You focused on CRA loans. CRA and subprime aren't the same thing.

 

[ceo]

Neg Am FTW! lol

 

[jnevin]

Yep. Needed good credit for those bags of shit.

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